Dick's set to win auction for Sports Authority brand: Sources
June 30 (Reuters) - Dick's Sporting Goods Inc, the largest U.S. sporting goods retailer, is set to win the auction for the intellectual property of bankrupt competitor Sports Authority with a bid of $15 million, according to people familiar with the matter.
Dick's shares jumped as much as 6 percent after Reuters first reported the development, which ensures it will no longer be competing against the Sports Authority brand. Dick's shares added 2.7 percent to $44.46 in afternoon trading in New York.
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Dick's and Sports Authority still have to finalize paper work on the deal, and a U.S. bankruptcy court judge has to approve it, two sources said on Thursday.
The intellectual property of Sports Authority includes its e-commerce website, SportsAuthority.com, a loyalty program with 28.5 million members, and a list consisting of 114 million customer files, according to an advertisement for the intellectual property auction.
Sports Direct International Plc submitted a bid of $13 million for the intellectual property, one source said. The British firm would be a back-up bidder if Dick's is unable to close the deal, though that is not expected, the source added.
Dick's also plans to take over the leases for 31 Sports Authority stores for an additional $8 million, said another person familiar with the auction.
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Other big box retailers scooped up Sports Authority leases. Best Buy Co Inc took a single location, one source said. Target Corp said it is looking at two locations in California.
The naming rights to a football stadium in Denver, Colorado, home of the National Football League's Denver Broncos, are still up for grabs, one of the people said.
The sources asked not to be identified because the outcome of the auction is not yet public. Dick's, Sports Authority, Sports Direct and Best Buy did not immediately respond to requests for comment.
Sports Authority, with 464 stores across the United States, had been a formidable competitor to Dick's. But the retailer struggled with a heavy debt load and competition from online giant Amazon.com Inc, as well as retailer Wal Mart Stores Inc.
Dick's could create an off-price chain under the Sports Authority brand, said Matt Powell, a sports industry analyst at the NPD Group. Discount is a growing sector in retail, he said.
Sports Authority held a bankruptcy auction for its assets on Wednesday, and the process wrapped up early Thursday morning, the people said.
It filed for bankruptcy in March. (Reporting by Jessica DiNapoli in New York; Additional reporting by Tom Hals in Wilmington, Del.; Editing by Jeffrey Benkoe)
